Bernstein Says US Ethereum ETFs May Include Staking Soon

• Possible approval of staking on Ethereum ETFs in the US.
• ETH staking yields can reach 4-5%.
• Investors are showing increasing interest in Ethereum.

Analysts at Bernstein Research indicate that Ethereum exchange-traded funds (ETFs) in the United States could soon offer staking yields. In a report released on December 2, the firm stated: “We believe that under a new crypto-friendly SEC under Trump 2.0, ETH staking yields will likely be approved.”

"Ethereum has been a laggard relative to Bitcoin – up 59% YTD vs. 124% for Bitcoin. However, Ethereum fundamentals look strong and the recent inflection in ETF inflows, indicates a solid revival of interest."

Four reasons to BUY, by @gautamchhugani pic.twitter.com/fVilvkPMgl

— matthew sigel, recovering CFA (@matthew_sigel) December 2, 2024

Ethereum staking involves locking up ETH as collateral with a validator on the Ethereum blockchain. Participants receive ETH rewards from network fees and other incentives, but they risk “slashing” — losing some of their ETH in collateral — if the validator acts inappropriately. Currently, ETH staking offers an annualized return of approximately 3,1%, according to data from StakingRewards.com.

Bernstein projects that as activity on the Ethereum network increases, these yields could rise to 4-5%.

In July, the U.S. Securities and Exchange Commission (SEC) authorized spot Ethereum ETFs to trade, but prohibited such funds from staking ETH for additional yields, despite multiple requests from ETF issuers including Fidelity, 21Shares and Franklin Templeton.

With the election of Donald Trump, who has promised to make the US the “cryptocurrency capital of the world,” there are expectations that pro-crypto leaders will take key positions in financial regulators starting January 20, 2025. This could accelerate the approval of staking for Ethereum ETFs.

At the time of publication, the price of ETHER was quoted at $3.620,21 with a drop of 1.8% in the last 24 hours.

Analysts also see ETH as an attractive investment opportunity, highlighting growing investor interest after a period of underperformance for Bitcoin. Ether investment funds have seen record net inflows of $2,2 billion in 2024, surpassing the previous record of roughly $2 billion in 2021, reflecting a “dramatic shift in sentiment” toward ETH, according to CoinShares.

Matthew Sigel, head of digital asset research at VanEck, projects that the Ethereum network could generate as much as $66 billion in annual free cash flow by 2030, pushing the price of ETH as high as $22.000 per token.

These positive outlooks are reinforced by the possibility of staking yields being approved for Ethereum ETFs under a more crypto-friendly administration, which could further boost investor interest and ETH’s market value.